Master file and country to country compliance Form 3CEAA, 3CEAB, 3EAC, 3CEAD, 3CEAE

BEPS CbyC and Master File Compliance

24th Amendment Rules, 2017

Forms to be filed

  • Form 3CEAA
  • Form 3CEAB
  • Form 3CEAC
  • Form 3CEAD
  • Form 3CEAE

Now we discuss about form 3CEAA:

Form 3CEAA

(Report to be furnish under sub-section (4) of section 92D of the Income Tax Act, 1961 read with rule 10DA of Income Tax Rules, 1962)

Parts of form 3CEAA and their applicability:

> Part A : For every entity having international transaction during the year.

> Part B : For an Entity having a international transaction and fulfilling two conditions:

A) Consolidated group revenue is more then Rs. 5,000 Millions.

AND

B) (i) Value of international transactions exceed Rs. 500 millions.

OR

(ii) Value of sale, transfer, lease or use of intangible property is more then`100 Millions.

To whom form 3CEAA furnished .?

Both Part A and Part B are furnished to “Director General of Income Tax (Risk Assessment)” {DGIT(RA)}

Cut off date to file Form 3CEAA to DGIT(RA):

  • Wording of Law:

> Report in form 3CEAA shall be furnished to DGIT(RA) on or before the due date for furnishing the return of income as specified in section 139(1).

> Provided in case of FY 2016-17 the due date for filling this form is 31st March, 2018.

  • Our Comments:

> Last date for filling CIT return is 30th November, i.e. cut off date for filling form 3CEAA shall be also 30t h November and as we know the first implementation year for this provision is FY 2016-17 and date specified under section 139(1) has passed. So CBDT inserted proviso in section and decide cut off date 31st March, 2018 for filling form 3CEAA for FY 2016-17.

> Above cut off date is applicable for both part A and part B.

Information required in form 3CEAA at the time of filling

Information required in form 3CEAA (Part A):

  • Name, address and PAN of assessee.
  • Name and address of International group of which assessee is a constituent entity.
  • Accounting year for which report is being submitted.
  • Number of constituent entities of the international group operating in India.
  • Name, address and PAN of all other constituents entities operating in India.

Information required in form 3CEAA (Part B):

  • List (name and address) of all entities of the international group.
  • Chart of ownership structure of all entities of international group.
  • Nature and profit drivers of businesses.
  • Description of supply chain for largest five product or services of the international group in the term of revenue, and other product or service having more then 5% of the consolidated group revenue.
  • A list and brief description of important service arrangement made amoung members of the international group except R&D services.
  • TP Policy for transactions made between members entities of group.
  • List of major geographical markets of international group.
  • List of Functions, assets and risk analysis of the constituent entities of group which contribute more then 10% of revenue or assets or profit of group.
  • Description of important business restructuring, acquisitions and divestments transactions.
  • Description of the overall strategy of the international group for development, ownership and exploration of intangible asset including location of principal R&D facilities and their management.
  • List of all entities and address which engaged in development and management of intangible property.
  • List of all intangible property of group, ownership entity and their address.
  • List and brief description of important agreement among members of group. Description of TP Policy of group related to R&D and intangible property.
  • Details of transactions of transfer of intangible property amoung members of group-

1. Name of Buying and selling entity.

2. Compensation paid for such transfer.

  • Detail description of the financial arrangements of group including name and address of top 10 unrelated lenders.
  • Name and address of group entities that provide financial functions.
  • Detail of TP policy of group for financial arrangement among group entities.
  • Copy of consolidated financial statement of group.

Now we discuss about form 3CEAB:

Form 3CEAB

(Intimation by a designated constituent entity, resident in India, of an international group for the purposes of section 92D(4)of the Income Tax Act, 1961 read with Rule 10DA of Income Tax Rules, 1962)

Object of form 3CEAB:

Where there are more then one constitute entities resident in India of an international group then in such a case, this form shall decide that which entity shall file form 3CEAA.

To whom form 3CEAB furnished .?

This form is also furnished to Director General of Income Tax (Risk Assessment)” {DGIT(RA)}

Cut off date to file Form 3CEAB to DGIT (RA):

  • Wording of Law:

> The intimation shall be made at least 30 Days before the due date of filling the report 3CEAA.

  • Our Comments:

> Due date of filling of 3CEAA is 30th November and due date for filling form 3CEAB is 30 days before the date of filling form 3CEAA i.e. Due date for filling form is 31st October.

> As we know that due date for form 3CEAA for FY 2016-17 is 31st March,2018, so as per above provisions due date for form 3CEAB shall be 1st March,2018.

Information required in form 3CEAB at the time of filling

Information required in form 3CEAB:

  • Name, address and PAN of designated constituent entity.
  • Name of International group.
  • Name and address of the parent entity of the international group.
  • The Country of residence of the parent entity.
  • Accounting year for which report is being submitted.

Now we discuss about form 3CEAC:

Form 3CEAC

(Intimation by a constituent entity, resident in India, of an international group, the parent entity of which is not resident in India, for the purpose of section 286(1) of the Income Tax Act, 1961 read with Rule 10DB of Income Tax Rules, 1962)

To whom form 3CEAC furnished .?

This form is also furnished to Director General of Income Tax (Risk Assessment)” {DGIT(RA)}

Object of form 3CEAC:

In this form every constitute entity resident in India shall inform to DGIT that-

  • Whether it is the alternate reporting entity of international group.

Or

  • The detail of parent entity or the alternate reporting entity of international group.

Applicability of Form 3CEAC:

This form is applicable only to those entities whose international group turnover exceed ` 55,000 Millions.

Cut off date to file Form 3CEAC to DGIT(RA):

  • Wording of Law:

> The intimation shall be made at least 2 Months prior to the due date of filling of CIT return under section 139(1).

  • Our Comments:

> Due date of filling of CIT Return is 30th November and due date for filling form 3CEAC is 2 Months prior to the date of filling of CIT Return i.e. Due date for filling form is 30th September.

– Due Date for filling for form 3CEAC for FY 2016-17 is 31st January, 2018.

Information required in form 3CEAC at the time of filling

Information required in form 3CEAC:

  • Name, address and PAN of constituent entity.
  • Name of International group.
  • Name and address of the parent entity of the international group.
  • The Country of residence of the parent entity.
  • Name and the address of alternate reporting entity.

Now we discuss about form 3CEAD:

Form 3CEAD

(Country by Country Report)

(Report by a parent entity or an alternate reporting entity or any other constituent entity, resident in India, for the purposes of section 286(2) or section 286(4) of Income Tax Act, 1961 read with rules 10DB of Income Tax Rules, 1962)

To whom form 3CEAD furnished .?

This form is also furnished to “Director General of Income Tax (Risk Assessment)” {DGIT(RA)}

Applicability of Form 3CEAD:

This form is only applicable for every parent and alternate reporting entity as prescribed by Form 3CEAC.

Note: If alternate entity is not Indian entity then no need to furnish this form.

Cut off date to file Form 3CEAD to DGIT(RA):

  • Wording of Law:

> Report in form 3CEAD shall be furnished to DGIT(RA) on or before the due date for furnishing the return of income as specified in section 139(1).

> As per the Notification No. 26/2017 dated 25th Oct, 2017, in case of FY 2016/17 the due date for filling this form is 31st March, 2018.

  • Our Comments:

> Last date for filling CIT return is 30th November, i.e. cut off date for filling form 3CEAD shall be also 30th November and as we know the first implementation year for this provision is FY 2016-17 and date specified under section 139(1) has passed. So CBDT issued notification no. 26/2017 and decide cut off date 31st march, 2018 for filling form 3CEAD for FY 2016-17.

Information required in form 3CEAD at the time of filling

Information required in form 3CEAD:

  • Name, address and PAN of reporting entity.
  • Whether reporting entity is parent entity of the international group.
  • Detail of allocation of Income Taxes and Business activity by tax jurisdiction.
  • List of all the constituent entities of the multinational enterprises group included in each aggregation per tax jurisdiction.

Now we discuss about form 3CEAE: Forms

Form 3CEAE

(Intimation on behalf of the international group for the purpose of the proviso to section 286(4) of Income Tax Act, 1961 read with rule 10DB of Income Tax Rules, 1962)

To whom form 3CEAE furnished .?

This form is also furnished to Director General of Income Tax (Risk Assessment)” {DGIT(RA)}

Applicability of Form 3CEAE:

This form is only applicable when the international group having more then one constituent entity operating in India.

Object of form 3CEAE:

In this form Intimation to DGIT is made that which constituent entity in India shall file form 3CEAC, when international group have more then one constituent resident entity in India.

Cut off date to file Form 3CEAE to DGIT(RA):

Till now, there is no timeline in rules, CBDT will release notification for the same.

Our comments:

Technically cut off date surely before the filling of form 3CEAC and in the case of FY 2016-17 the date is not yet prescribed so as per my understanding date for filling of form 3CEAC will extend (currently 31st Jan, 2018)

Information required in form 3CEAE at the time of filling

Information required in form 3CEAE:

  • Name, address and PAN of reporting entity.
  • Name of International group.
  • Name and address of the parent entity of group.
  • Name, address and PAN of constituent entity designated for furnish form 3CEAC
  • Name, PAN and address of all other Indian resident constituent entity of the international group.

Other Common Points

Period of Maintain the records:

> The information and documents shall be kept and maintained for a period of 8 years from the end of relevant assessment year.

i.e. in case of FY 2016-17 (AY 2017-18) the record shall maintain till AY 2025-26 and in case of FY 2017-18( AY 2018-19) the record shall maintain till AY 2026-27.

Exchange Rate:

> The rate of exchange for the calculation of the value in rupees of the consolidated group revenue in foreign currency shall be TTBR of such currency on the last date of the accounting year.

i.e. in case of FY 2016-17 the exchange rate shall be TTBR rate as on 31st March,2017 and in case of FY 2017-18 the exchange rate shall be TTBR as on 31st March,2018 of respective currency.

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6 responses to “Master file and country to country compliance Form 3CEAA, 3CEAB, 3EAC, 3CEAD, 3CEAE”

  1. CA ANAND says:

    In the column accounting year , which accounting year should be mentioned? indian entity or foreign parent company?

  2. Nitin says:

    Is there any option to revise form 3CEAC or any practical experience about this

  3. arun says:

    Very informative

  4. Vikas Kumar Ghuwalwala says:

    Very good article keharsinghji. Easy to understand and very well drafted.

  5. CA Kehar Singh says:

    I m sorry for two mistake in above article, please read due date for form 3CEAC is 31st Jan,2018 instead of 31st Jan,2017.

    Please read this line “As we know that due date for form 3CEAA for FY 2016-17 is 31st March,2017, so as per above provisions due date for form 3CEAB shall be 1st March,2017.”
    as this
    “As we know that due date for form 3CEAA for FY 2016-17 is 31st March,2018, so as per above provisions due date for form 3CEAB shall be 1st March,2018.

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